Photo: AFP

The consensus estimate put US first-quarter GDP growth at 2.0%. The estimate just reported by the Commerce Department came in at 2.3%, a bit higher, but the composition of growth showed a still-sluggish US economy.

Inventory change added 0.43% to the Q1 number (as opposed to a  -0.53 deduction in last year’s Q4), and net exports added 0.2% (vs. a 1.16% reduction in Q4).  Otherwise the report was unimpressive. Personal consumption expenditures added just 0.73% to the 2.3% top line number (vs. 2.75% in Q4 of last year). Fixed investment added just 0.76%, vs. 1.31% in Q4. Particularly impressive was the turnaround in GDP from durable goods (-.24% in Q1 vs 1.67% in Q4).  Inflation was unchanged.

None of this suggests support for an overly aggressive Fed policy and augurs for relatively stable long-term US interest rates.